In the Long Run,the Imposition of Average-Cost Pricing in Natural

question 58

Multiple Choice

In the long run,the imposition of average-cost pricing in natural monopolies,such as Manitoba Hydro and New Brunswick Power,would generally lead to

• A)allocative efficiency.
• B)productive efficiency.
• C)distorted investment decisions.
• D)a reduction in the output by these firms.
• E)both allocative efficiency and productive efficiency.

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